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Retreading Losing Cause, City Will Take Over Running Palm Harbor Golf and Tennis Center

| March 30, 2017

Palm Coast is putting on a new face on management of the city-owned Palm Harbor Golf Course--its own. (© FlaglerLive)

Palm Coast is putting on a new face on management of the city-owned Palm Harbor Golf Course–its own. (© FlaglerLive)

Palm Coast government will be taking over day-to-day management of the troubled Palm Harbor Golf Club and the Palm Coast Tennis Center by mid-summer, ending management by KemperSports, the company that’s run the two operations for the city for eight years, but at significant loss year after year. The city has had to make up the annual deficits, which totaled close to half a million dollars in 2015.

The city and KemperSports have been unable to agree on a contract extension, which in effect forced the city’s hand to take the more controlling approach.

There is no guarantee the city will more profitably run the two operations under its own management. That business plan and profit-and-loss statement is yet to come. But by more completely absorbing them into its parks and recreations operations—as opposed to running them as separate, contracted budgetary line items—the line between profit and loss will be blurrier, and the operations will be more similar to city parks, which don’t make money (and aren’t intended to make money), though unlike parks both the tennis and golf clubs will remain fee-based amenities.  

“Today we are hoping to change the conversation and go into a whole new direction,” City Manager Jim Landon told the city council Tuesday, acknowledging, as a previous council had last year, that continuing the old contractual approach no longer made sense, but in stronger language. “What do they say, the definition of insanity is when you keep doing the same thing over and over again.”

Still, the approach had City Council member questioning how—and whether—it would substantially differ from losses prevailing now, especially as golf remains a troubled leisure industry: it’s hemorrhaging users.

“A little more control,” is how Landon explained it. But also more directly fusing the operations with parks and recreation. “Golf itself is a tough business right now,” Landon conceded, with many clubs not making money. “We’re trying to approach this from an amenity, from a recreational standpoint, and getting away from the formal management like a club-type setting.”

Council member Steven Nobile, concerned about future costs, agreed that the golf club is an amenity, “but I don’t see it as a lot of our amenities, because this is a very high-expense amenity,” Nobile said. “I don’t mind putting money into it, but we’ve got to make sure we’re not throwing money at it, so that it’s an effective, efficient and well-designed plan and organization.” If the course is not producing a lot of money that can be reinvested in the course, then taxpayers would still have to subsidize it as they do now. “I’d like it to be able to sustain itself,” Nobile said.

The city could not reach a continuing agreement with Kemper, with whom it’s on a month-to-month basis, because the two sides finally parted ways on risk, even though that had been the arrangement all along. “They have no risk, they make $84,000 a year no matter how the course goes,” Landon said, reflecting the flaw at the heart of the city’s relationship with Kemper all these years: Kemper could run the operations at any loss to the city. City taxpayers would always be there to pick up the difference. And they have. Even when Kemper employees had workers compensation issues with Kemper—and would sue the company—the city had to pick up some of those costs, Landon said.

“And we said no,” Landon said. “If your employees screw up, that’s your liability, that’s your responsibility, and they said no, that’s not our model, we’re not going to sign a contract where we have any risk involved.” So if the city were to have more risk, it would assume more control.

Click On:

The current approach is to change direction. The city would adopt a hybrid system. It would retain management of the tennis and golf operations but contract out specific services such as running the restaurant, marketing, maintenance, janitorial services. It’s not much different from what’s in place now: the city owns the facilities and contracts out with a single management company (Kemper). The “new” approach would mean that it would contract out with a number of companies, and itself also be in the management business. The city would also hire a consultant to craft what proposal requests it would advertise. That approach would allow the city to eliminate the current management fee it pays Kemper–$84,000 at the golf course, $23,000 at the tennis center for the year.

The city would take control of the course conditions, programming and special events, marketing and fee collections.

The city got some management consultants interested too implement the hybrid approach, but some of the responding companies wanted ultimately to manage the facility, “which isn’t what we were interested in,” Landon said. The city settled on a company called Morningstar Golf and Hospitality of Princeton, N.J., to put in effect the 30-day transition away from Kemper at the tennis center. The city plans to maintain current programs, with the transition completed by the end of April, and the city’s recreation department running the facility by then. A city recreation supervisor would have a full-time office there.

Five consulting companies applied to manage the transition at the golf club. Morningstar got the nod. “The main factor for it was that they were a true consulting option,” Alex Boyer, the city’s parks and recreation director, said. “They had a short contract timeline that would allow us to come in, focus on what we want to do and then make it city management.” Morningstar will help the city write a business plan, hire staff, set up internal controls and prepare requests for proposals for the various services the city will contract out.

Kemper would end its tenure at the golf course on July 31. The course would close for two weeks after that to shift management to the new system, re-opening under city management on Aug. 14.

“As far as what it’s going to cost,” Landon said, “it’d be very similar to what we’re paying today.”

That’s the approach the council appears ready to adopt next week in the form of a $30,000 contract with Morningstar.

“I see a lot of advantages to this conversation, in particular about putting it under parks and rec and truly making it part of Palm Coast’s great amenities,” Mayor Milissa Holland said.

Klufas suggested partnerships with other public courses, especially those that have had similar experiences with Kemper.

But the city is now using the same language as Kemper did over the years—projecting success far into the future, meanwhile giving the approach of the moment a chance to work. “Everyone is kind of figuring out what it is,” Boyer said of the new process. “The reason we proposed the hybrid model is that we’re not diving in to a full choice. Right now we’re trying to maintain the asset itself, maybe looking at growing some programs but also looking how we can continue to focus on specialty things, which is contracting those areas out. But this gives us a long-term plan that maybe we go back to something else. But we’re not completely making one decision or another, we’re going to have to wait three or four years before we can make a decision to ‘yes.’”

“We’re trying to do a very comprehensive approach,” Landon said. “But it is a specialty area that we don’t have the expertise, and that’s why we’re trying to bring in somebody that does, is really what it amounts to. We need another team player to finalize this.”

Of course, that’s also what the city had said of KemperSports year after year.



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33 Responses for “Retreading Losing Cause, City Will Take Over Running Palm Harbor Golf and Tennis Center”

  1. Steve Vanne says:

    U know if u lower the tennis membership that might be a way to get more members. The yearly rate membership rate is outrageous. I was excited when the tennis center open, but when I saw the yearly rate I passed. There r just to many free courts to play. Something to think about……….

  2. woodchuck says:

    Just sell it to devolpers and put some upscale houses so property values don’t decline.AT LEAST the city can collect tax dollars so the powers to be can waste it on another stupid ass project.P.S. not talking low rent apartments.

  3. Outsider says:

    Sell all the parks too to upscale developers. That will get taxpayer dollars to the starving city officials and stop the thugs running through yards to get to the parks.

  4. Jan Reeger says:

    It continues to amaze me. $30,000 to work for one month. Being a consultant for Government is certainly lucrative. We see it so very often. I hereby offer to do it for $20,000. And I could do a good job. I also think City Staff could do it. Sigh.

  5. Dave63 says:

    I think once the city sees how much money Kemper wasted by poor management the course could break even if people go play and if the city reviews the membership rates and daily fees for walkon’s. ..

    Turning this land into another freaking home project, condo’s apartments etc.. would be a good waste of space and decent land. We don’t need anymore homes packed tight together.

  6. Jo says:

    I do not think Jim Landon is the best person to be discussing taxpayers funds considering how overpaid he is for the lack of work he does in the city. Typical politician. I would like to see how they justify spending when they realize how expensive it is to outsource.

  7. Veteran says:

    Many people moved here to play golf and tennis year round. We don’t need to replace the golf course with any kind homes.

  8. r&r says:

    The golf course is used by many and I think it HAS to stay. The city has a way to show a profit and cook the books so let’s see what happens.

  9. Dave says:

    Golf is a dying industry,we need more parks for kids and maybe some affordable Living opportunities for our youth, last thing we need is a wasteful out dated golf course which makes no money and provides nothing for 90% of flagler county residents

  10. Sw says:

    If ya” cook the books” lol It still costs the Taxpayers money.

  11. TwoLameDucks says:

    The city does not own 2 crucial areas: Parking lot across the street, including the pratice chipping green & the entirety of the driving range, and surrounding areas. This land owned by either Pulte or Jacoby, always has been. Soon both areas will be developed with condos, removing ALL revenue the practice facilities bring in. No driving range means no programming for kids, summer camps, etc. Once this step is completed, the city will push to sell off more, make 9 holes only, etc. This will be the death blow. More jobs lost, more housing, less activities for the youth.

    Palm Harbor is in serious jeopardy here…Palm Coast’s first golf course and former home to LPGA great, Nancy Lopez. Cook the books all you want (R&R is right they will move things around) the land is as good as gone.

  12. YankeeExPat says:

    “You’ll get nothing and like it.” — Judge Smails

  13. gmath55 says:

    Isn’t golf like watching paint dry? Just saying…..

  14. Veteran says:

    Golf is not a dying industry. I don’t bowl, so let’s close all bowling alleys. I don’t play basketball, why not get rid of basketball courts. There are 8 golf courses in Flagler County and they are all operating. If Palm Harbor was a park it would cost more to the city since there would be no income.

  15. RayD says:

    As Landon told a group of us, golf courses, golf courses, don’t talk to me about golf courses we are saturated in golf courses. Back at you Landon and your unpopular golf course. You rebuilt the wrong course! If this city government cannot successfully contract with a private company, the city manager should resign and enjoy his golden parachute.

  16. Robjr says:

    It was, is and always will be a loser. Even worse when the city gets its hands into it.
    Landon sold that bridge as a money making entity, being able to stand on its own.
    That was how many millions of dollars ago.
    Him, Netts, and all the rest who clamored to develop a golf course when all other golf courses in this area were in the red or closed down.

    Who will get the jobs at the golf course, friends of friends.

    The town council is only interested with saying, “Oh look at us, we have a golf course and a tennis court.”

  17. Veteran says:

    You are correct RayD. Should have rebuilt Matanzas Woods.

  18. Josh Davis says:

    It’s a lot more profitable though!

  19. Lazaruis says:

    Why not make everybody happy and put low rent apartments on it and everyone can quit complaining about spending money and not having enough affordable housing . And just to make sure everyone is happy — yes golf is a dying sport ! Ha !!

  20. Lazaruis says:

    Check it out yourselves … should we invest more money in a dying “sport”
    In 2013, 160 of the country’s 14,600 golf facilities closed, the 8th consecutive year of net closures. The number of players has fallen to around 25m.

  21. Flatsflyer says:

    I’ve got friends who brag about playing golf for $19 for a round of golf including cart rental. No wonder this money pit costs me tax dollars, players are too dam cheap to pay their own way. Close this down once and for all. The city continually screws up every thing it touches, Holland Park is the latest example.

  22. DWFerg says:

    Comments- Remember when the course was shut down and the eyesore it became on the community. Can’t imagine what value the consulting company will add to the transition given that the City should already know what the critical areas of management that Kemper was providing. The new Country Club Harbor development on the back side of the course has /will continue to provide added tax revenue. Managing a golf course is not rocket science—need a quality product, customers and committed employees. Support continued separate accounting of golf and tennis operations—

  23. Brad W says:

    This is a good thing in my opinion. Not that Kemper is a bad company. It just wasn’t happening and it’s time to try another route. There is need for innovative play and events at both spots. On the golf front adding foot golf is a huge opportunity to increase traffic and create opportunity to introduce the traditional game to new players as well. The tennis center has the space for and should add permanent 36′, 60′, and pickleball courts. Again, increasing traffic and introducing new players to the game. Likewise, there is opportunity for better engagement with the community through more innovative marketing strategies (short instruction videos, photo/video of events) and innovative events. Newer style one-day tournaments on the tennis front have been proving to be very popular . . . Fast 4 for Adults, One-On-One Doubles, 1-day timed Entry-Level tournaments for Juniors, etc. And promotion of local club play can also have huge benefits (local league tennis and golf).

  24. RayD says:

    Its not so much the golf is a dying sport debate, its more that Palm Harbor has not been successful partly due to the layout and very slow pace of play. Those problems will not alleviate when the city takes over. Grand Reserve, Halifax and Riverbend are better layouts with a faster pace of play. Those courses are also privately owned and operated. The best solution would be to sell to the highest bidder who will keep it a golf course and let that private owner figure out how to turn a profit.I’m not so sure an albatross of a golf course that habitually loses money improves the quality of life or draws visitors or new residents. As it is, it draws criticism and doubts about the integrity, motives and qualifications of city officials.

  25. cls says:

    Turn it into a true public Palm Coast/Flager Co golf course, lower the rates for Palm Coast residents and Flagler Co. residents (kind of like Volusia beaches do for drivers – out of county people pay more than residents) and include 9 hole play fees, 18 hole pay fees and yearly seasonal fees (which will be lower for residents of course). I think Palm Coast has enough equipment to be able to maintain the golf course and golf carts.

  26. Veteran says:

    cls, everything you suggested has been in effect since the course opened.

  27. Born and Raised Here says:

    Palm Harbor GC is in a poor location, and is also located in the oldest part of town, with the cheapest and oldest homes in Palm Coast. I would like to see the city close it down, and refurbish Matanzas Woods, which at one time was one of the best golf courses in Florida, and holder of few Q Schools for the PGA Tour It is also located next to I 95 and US 1 which is easy access and will bring a lot of out of town play.

  28. Anonymous says:

    I get that having a golf course as part of the park system is a good thing. the park system does NOT need to make money.As for the tennis center maybe that should have been a privet investment as dont most all parks already have a court or two along with many schools. What would be nice is a WMCA complex like the one in Ormond

  29. Born and Raised Here says:

    If the City was smart, they would close Palm Harbor GC, and focus on restoring Matanzas Woods GC. Many good points to consider Matanzas Woods. Such as, a much better layout and challenging Golf Course. A more modern drainage and irrigation system. Matanzas Woods GC was built in 1984, where as Palm Harbor GC was builf in 1972. A stellar background, holding not one, but two Q Schools for the PGA Tour. One time Matanzas Woods GC was one of the best golf course in Florida.The architect that designed Matanzas Woods was the Arnold Palmer Group, where a local architect by the name of William Amick did Palm Harbor GC. Matanzas is located in a newer section of Palm Coast, with very easy access from I95 and US 1, for outside play. Whereas, Palm Harbor GC is located in the oldest section of the town, built in 1972, and is complicated for someone to get to if they do not know the area.
    So I think Matanzas Woods would be a far better R.O.I. ( Return on Investment ) So to the City of Palm Coast, I beleive you’re sitting on a potential gold mine with a little investment in Matanzas Woods, GC

  30. Glad I left Palm Coast says:

    How can the Towns of Dennis, Yarmouth, and Barnstable up on Cape Cod Ma, make thousands of $$$ on each of their municipal courses (each town has 2) ? Simple they have affordable memberships for the town residents. $800 a year to play 2 courses that is a great deal. The summer season with high tourism generates the rest of the income with high end golf fees ranging from $65 to $90 depending on season and time of day. The golf courses are packed !!!
    Here you have year round golf, great weather, plenty of hotels, and restaurants. What is wrong here in Palm Coast? Stupid politicians,& stupid City Manager with no common sense. Give the city residents a decent membership rate, $500 a year to play is a deal. Sell 1500 memberships you half a million $$ right into the kitty. Offer competitive or slightly lower rates to non-city residents to fill up unused tee times you will have a facility generating revenue. Take 10% of revenue from restaurant you have more income.
    Lease golf carts instead of purchase and retain all profits after lease payments made.
    Partner with local hotels to create golf packages. Promote youth golf get the kids involved off the streets.
    I hope they can work it out great course although not my favorite, too many trees. Hate to see it like it was back in the day.

  31. Mark101 says:

    Matanzas Woods you got to be kidding. Its been closed since 2007, its beyond hope and restoration would cost the tax payers a ton of money. The course closed for a reason in 2007. Golf in this county is dead, too many old people that don’t want to pay for nothing, but they do know how to complain.

  32. Born and Raised Here says:

    Not counting on local play to support Matanzas Woods. People will come from everywhere to play a championship golf course.

  33. Dave says:

    Laughing so hard at restoring matanzas golf course, that place is used for many things,golf is not one of them.hahaha

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